Rochester, NY-based Agrilink Foods, a manufacturer and marketer of frozen vegetables, and investment firm Vestar Capital Partners have announced the completion of a US$175m equity investment in Agrilink by affiliates of Vestar.
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The change in control transaction, originally announced on 21 June 2002, values Agrilink at about US$800m. Agrilink had been a wholly-owned subsidiary of Pro-Fac Cooperative, a 500-member grower cooperative which will continue to hold a significant minority interest in Agrilink.
Agrilink expects to report sales in excess of US$1bn for its FY ending 29 June 2002. The firm markets its branded frozen vegetable products under the Birds Eye, Birds Eye Voila!, Freshlike and McKenzie’s names. In addition, Agrilink produces other branded processed foods, including canned vegetables (Freshlike and Veg-All), pie fillings (Comstock and Wilderness), chili and chili ingredients (Nalley and Brooks), salad dressings (Bernstein’s and Nalley) and snacks (Tim’s, Snyder of Berlin and Husman’s). Agrilink also produces many of these products for the private label, food service and industrial markets.
Vestar’s investment was subject to several conditions that have now been met, including a Pro-Fac member vote, bondholder consent and the receipt of new senior financing. Agrilink also secured US$470m in new senior financing. Net proceeds from Vestar’s investment, together with the proceeds from the new credit facility, will be used by Agrilink to retire existing bank indebtedness. Agrilink has now entered into a new long-term supply agreement with Pro-Fac and has committed to make certain additional cash payments to Pro-Fac over the next several years.
Dennis M. Mullen, Agrilink president and CEO, will now also assume the role of chairman on a new Agrilink board of directors. Current Agrilink management will continue to run the business under Mullen’s leadership. “We are very excited to enter into this new relationship with highly regarded Vestar,” Mullen said. “With the new equity capital and materially lower debt, we are well positioned for significant future growth. This transaction is good for Agrilink and good for Pro-Fac, which will continue to be our main supplier of raw product.”
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By GlobalDataPrakash A. Melwani, an MD of Vestar, explained that Agrilink is a natural fit with his firm’s long-term investing philosophy. “Our strategy is to partner with solid companies run by motivated managers with great industry experience,” said Melwani. “We’re excited to help Agrilink take Birds Eye and its other strong food brands to the next level.”
